Macroeconomics

Macroeconomics - May 22, 2008 Lecture Macroeconomics Oil...

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May 22, 2008 Lecture Macroeconomics Oil Price OPEC does not determine the oil price  Determinants: China and India became richer (imports increased), value of the dollar  depreciated (U.S spend more to buy Euro), Demands for oil increase  Trade Deficit One country borrows money from other countries One country is selling its assets to other countries Trade Deficit vs. Budget Deficit vs. National Debt  1. Budget Deficit Always existed except for 3-year Clinton administration  2. Trade Deficit  $847 billion in 2007 3. National Debt  Deficit Outstanding  $9.5 x 10^12 Everyone is debt with over $30,000  Public Debt =36.8% of GDP  External Debt – 12.25 trillion (2007)  U.S.  – Too much borrowing/ losing competitiveness/ hurting the value of dollar  China  – Imports from U.S.A / Sells T-bill bonds (financing U.S. government)  Housing Issue Encourages economic activity Good for government  Economics Concerned with optimum allocation of Limited Resources among Unlimited Wants  Needs are Limited but Wants are Unlimited  Economic Resources 1
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May 22, 2008 Lecture Labor, Land, Capital, Entrepreneur  Economic Resources – All are Limited. 
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Macroeconomics - May 22, 2008 Lecture Macroeconomics Oil...

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